Tuesday, June 14

Why Digital Comics Should Remain Cheap

I had a reader leave a response to my post about Diamond comics saying that he had heard the argument about keeping digital comics cheap and that he disagreed. I responded back, but afterwards thought it important enough to warrant its own post. So here are my thoughts on digital comics and pricing, and why keeping them cheap is good for the industry:

Hi Eric - good comments. I am not so concerned with what Netflix has done for the HOLLYWOOD movie industry as the independent industry. It has given a HUGE platform for indy filmmakers whose work might otherwise never be seen. I am constantly running across little indy films on Netflix, some good, some bad, and love it!

The digital comics transition is going to be interesting to watch, but my whole point is this - without the costs of printing and Diamond taking their obscene cut of profits there is no reason to gouge your loyal fanbase. And yes, that is who the majority of comic book digital readers will be, people who already read comics. However, by offering lower cost digital books more of these readers might be tempted to check out some newer titles they otherwise might not:
1. Have the money to buy or
2. Even have ever heard of

Let's suppose a company establishes an online catalog of books, makes them available for .99 cents each and says you get one free with every ten you order. That is eleven books for ten dollars. DAMN! Not bad. How many more might they check out - at that rate why not? And if they like it they'll probably want to buy the hard copy, which they can get straight from the publisher, allowing him or her to make more money…

Diamond's business model discourages retailers from taking chances. It also makes it neigh impossible to make money for a creator.

Let's look at a book that charges 2.99 per issue. Pretty commonplace, right? Actually might be low nowadays. Anyway…
They sell 1000 through Diamond. That's 2999.00 - BUT Diamond takes their 60% off the top - 1799.4 - meaning the creator actually gets $1199.6 from Diamond. I know printing costs have risen, but let's conservatively say printing through Brenner where Diamond can pick up the stock off the docks (thus no shipping charges) costs 1200.00 bucks for arguments sake. There is no profit there and you just sold 1000 books.

Let's say that same book charges 3.99 per copy. 3999.00 profit minus Diamond's 60% rape of 2399.40 leaves $1599.6. A little better. But minus your 1200 printing cost you're left with a whopping 399.6 bucks. Average of .39 cents per book profit.

At .99 per book for a digital sale you'd only need to sell 400 books to make the same profit as a 1000 copies of a 3.99 print book distributed through Diamond (and this is using our conservative printing costs - actual printing costs nowadays are, I'm sure, much higher) .

I just do not think people are going to pay much for a digital book. You can't collect it, people can pirate it… but keeping it low encourages people to take a chance on new comics and why not buy it, it is so cheap anyway?

This is why cheaper digital books are good for the industry. If you make it expensive people simply won't buy it - You don't have a physical item that you can collect and it just isn't worth 3 or 4 dollars to buy it. That is an honest opinion. Plus the higher the cost the more you're encouraging people to pirate it. Again an honest opinion.

2 comments:

You do realize that Diamond takes 60% and that most retailers buy from Diamond between 45-55% off cover price? That means Diamond is making anywhere between 5-15% depending on the size of the retailer? I'd hardly call that an "obscene cut of profits".

It's a cost of doing business. And if you can't sell 2K comics (which is basically 1 comic to each store out there)... you really shouldn't be in the comics business.

Well like I said in a previous post I'm basing these numbers off data from when I last worked in the field, which was back in the late 90s. 1000 comics was a decent number back then, what I considered minimum to continue publishing that book.

60% of cover price to deliver a book is a big hit. I am looking at this from a small press point of view. But the main problem is Diamond has no real competition, so they can charge what they like and treat small press however they feel.

Why would Diamond care how many issues a publisher sells? It's their job to distribute, not dictate numbers, quality or anything else. They are paid to take books from point A to point B. In the case of books at Brenner they are picking up the books directly from a dock and delivering to that store anyway.

The way Diamond determines who gets best placement in a book, spotlighted, etc is ridiculous. Why should they determine the market, what gets seen, what gets an opportunity, basically. Raising the minimum number sold in order to get the privilege of distribution from Diamond.

And the practice of packing a few books in a big box so they can gouge the retailer for more money is wrong too. I've heard from multiple sources that Diamond continues to ship several books a few to a box, sometimes delivering multiple boxes to one destination instead of combining them into one box to save shipping costs for the retailer.

Again, it isn't your business to determine how many books I or anyone else should sell to stay in business. The sooner some real competition comes along for Diamond the better.

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